Raízen (RAIZ4) Q4 24/25 earnings summary

Executive summary

• Severe drought and wildfires in the 2024/25 crop year reduced sugarcane yields, impacting operational and financial results, especially in Ethanol, Sugar, and Bioenergy (ESB), and prompting renewed focus on core businesses, cost control, and asset sales.

• Strategic portfolio rotation, leadership renewal, and corporate reorganization were implemented to drive efficiency, reduce debt, and support new strategic focus.

• Entering a new cycle with evolving priorities focused on delivering returns from recent investments, especially in sugarcane productivity, renewables, and mobility.

• Record sugarcane crushing and advances in sugar, ethanol, and energy production; strong performance in Mobility Brazil and Latam with margin expansion and cash generation.

• Trading operations were restructured to reduce risk and volatility, discontinuing non-core and loss-making activities.

Financial highlights

• Net revenue reached BRL 57.8 billion, up 18% year-over-year, with net income up 59% to BRL 1.1 billion; however, another segment reported net revenue of R$255.3 billion, up 15.8%, but a net loss of R$4.2 billion.

• Adjusted EBITDA was BRL 3.3 billion, down 29% year-over-year; another segment reported adjusted EBITDA of R$14.6 billion, down 25.9%.

• Leverage increased to 2.3x from 2.0x in Q1 23'24; another segment reported leverage at 3.2x, with net debt up 78.9% to R$34.3 billion.

• Cash generation supported mandatory investments, especially in refinery modernization and E2G expansion.

• Recognition of BRL 1.8 bn tax credit related to ICMS exclusion from PIS/COFINS tax base boosted net income.

Outlook and guidance

• Sugarcane crushing for 2025-2026 is expected to be flat year-over-year, with guidance of 72-75 million tons, while another segment projects 82–85 million tons for 2024/25.

• Adjusted EBITDA guidance of BRL 14.5–15.5 billion (+14% YoY); CAPEX guidance of BRL 10.5–11.5 billion (-13% YoY).

• Discontinued financial guidance for 2024/25 in one segment due to ongoing portfolio and capital structure optimization.

• Deleveraging will be gradual, supported by asset sales and operational improvements, with a return to healthier leverage levels anticipated over several years.

• Anticipated benefits from investments in biological assets and E2G plant ramp-up; focus on maximizing returns through tactical inventory management.